Assessing company performance


Intrigue is brewing in the boardroom at Standard Can, and the future of J.F. Hiltmann and Stephen Sablon continues to hang in the balance. Will Jerome Fantam allow a management buy-out that could save them all?


Jerome Fantam  
Leo Schooler  
Patricia Hart  
Anton Hiltmann  
Stephen Sablon  
Commentator on the radio. He is British.


Vocabulary Business journalism; food processing; doubt and suspicion; the end of a company's life.
Skills Discussing sales figures; congratulating someone; expressing criticism and disappointment.
Structures Analysing a long sentence; the next, the last.
Documents A press release; a magazine article; notes for a letter.

Assessing the prospects

24.1 Document study

This is one of the press releases for the new Maxy product range. Read through it carefully. Has Maxy gone up market or down market? How do you know?

PRESS RELEASE see the meaning


For more than a century, J.F. Hiltmann und Söhne AG of Dusseldorf has enjoyed a Europe-wide reputation for the excellence of its MAXY seasoning. Acquired last year by US giant Standard Can, Hiltmann is about to stage an exciting presentation of a whole new product range: MAXY 'COOK'S-TOUCH' bottled sauces and flavourings, bringing convenience food see the meaning at last to the level of haute cuisine. see the meaning

Sixteen test products were used, in various strengths, to cook a number of popular dishes. A panel of tasters tried each dish at lunches in Standard Can's offices in Athens, Rome, Paris, Berlin and Madrid. They were also given cook-chill packs of the food to try at home with their families.

The results leave no doubt that the six most popular flavours across the board were:

  • Goulash
  • Bouillabaisse
  • Chicken Kiev
  • Saltimbocca
  • Chili con Carne
  • Irish Stew

24.2 Reading for key words

Find the words or phrases in 24.1 that tell you the following:

1 To make public.
2 Food which can be prepared and cooked in a few minutes.
3 A group of people who were asked to try the food and say what they thought of it.
4 Boxes of refrigerated, cooked food.
5 In each area or department.

24.3 Listen and read

Leo, Patricia and Jerome Fantam are meeting in New York. Listen to what they say. Why is Patricia surprised and suspicious?

JEROME Leo, Patricia - could I have a word with you before you go? What do you make of this story from Geneva?
LEO From Geneva?
JEROME About food additives. see the meaning Somebody's leaked a government analyst's report. see the meaning
PATRICIA You'll have to fill us in on the details. see the meaning
JEROME I don't know any details. It seems there are reports of a new link between certain anti-oxidants and cancer. see the meaning I wondered if you'd heard anything. No? Well, thank you both for being here today - I'll see you in Dallas in September. You take care, now. see the meaning
PATRICIA What do you make of that?
LEO It's not like him to ask about rumours. He generally starts them. Likes to keep the opposition guessing.
PATRICIA Mm. Precisely!

24.4 Speaking practice: starting a rumour

Listen to this conversation. Then listen again, and speak the part of the man.

WOMAN Did you read that analyst's report that I sent you last week?
MAN Er - oh yes, I remember. Could you just remind me of the details?
WOMAN Well, briefly, it said that our claim that the product contained certain vitamins was unjustified.
MAN That's strange. Who was this analyst working for?
WOMAN We don't know. Apparently, the report was leaked. I wondered if you'd heard any more about it.
MAN No. But I find it very hard to believe. They've always been very strict about these things in Germany.
WOMAN Well, the boss seems very keen to tell everyone about it. Now why should he do that?
MAN It's not like him to spread a rumour, especially if it hasn't been confirmed.
WOMAN No, but he's quite capable of starting one if it suits him!

24.5 Listen and read

Anton Hiltmann is having a telephone conversation with Stephen Sablon. Listen to what they say. Which area had the lowest sales? Why is this surprising?

ANTON Stephen? I've got the print-out here for the first month's sales figures for the new Maxy range. Hot off the computer. see the meaning
STEPHEN Uh-huh. How do they look?
ANTON Well, you'll be able to access the data direct within the next half hour, but, briefly, total turnover was nineteen million dollars, equal to the best month we ever had with the old Maxy. In Germany alone we shipped one point three million dollars' worth of stock, and the lowest sales were point three six of a million in, guess where, Greece!
STEPHEN Fantastic. Well done, Anton - I really do congratulate you.
ANTON I've got Patricia here, by the way - says she'd like a word.
STEPHEN Oh, great. Put her on. see the meaning
PATRICIA Stephen? Just glancing through these print-outs, I'm a bit worried about France - new Maxy is under-achieving in the northern and western regions.
STEPHEN Yes. I understand there was a hitch with the TV commercials for that area. Just a hiccup, it's all sorted out now. Oh, but since you're there - do you know anything about this leaked analyst's report?
PATRICIA No. Should I? What is it?
STEPHEN Something about anti-oxidants. Jerome Fantam was saying something about them yesterday. Does Hiltmann use anti-oxidants?
PATRICIA Er - I think I'd better hand you back to Anton.

24.6 Writing practice: Stephen Sablon’s notes

Stephen keeps notes on the progress of Maxy. Write his notes for him after his conversation with Anton and Patricia.

{tip Exercise 24.6::This is a model answer.
Anton telephoned with the first month's sales figures for the new Maxy range. More or less as I had expected; $19 million overall for the month. Of course I congratulated him with great enthusiasm - he really seemed to be very pleased with himself. Patricia then took the phone from him and started complaining about poor sales in France. When I asked her about the anti-oxidant reports she handed me back to Anton - she obviously didn't want to discuss the matter.}Key{/tip}

Assessing the damage

24.7 Document study

This is the article that appeared in a popular consumer magazine on the food industry. Read through it carefully. Why would Anton Hiltmann be concerned about the article? What effect would the article have on consumers?



Confidential reports originating from government laboratories in three European countries suggest that certain synthetic food additives may not be as harmless as was hitherto supposed {tip hitherto::up to now; a formal usage.}see the meaning{/tip}, even in the low concentrations permitted by EC regulations.
{tip Foremost among::one of the most important of.}see the meaning{/tip} Foremost among the alleged offenders is BHX, a compound used in many cooked foods and branded food flavourings such as the popular 'Maxy' sauce. BHX has long been suspected of causing hyperactivity in children. {tip hyperactivity::constant, excessive activity, which eventually damages a child's health.}see the meaning{/tip}
Now there is evidence linking it to certain types of cancer - even though it is thought to give protection against other types. It is known to raise blood cholesterol levels and in some circumstances to destroy vitamins that the body needs.
BHX is an anti-oxidant: it inhibits oils and fats from becoming rancid and toxic. {tip rancid and toxic::sour-tasting and poisonous.}see the meaning{/tip} Because it is heat-resistant and can withstand cooking, it is hard for the food processing industry to find an adequate substitute at an acceptable price.
The President of the European Food Marketing Federation, which represents manufacturers throughout the EC, said last night:
'Much more thorough testing is required before we can say there is any scientific basis for banning BHX and similar compounds.'

{tip Exercise 24.7::Anton would be concerned because the article appears to link Maxy sauces with cancer. The effect of the article would be to discourage people from buying Maxy sauces.}Key{/tip}

24.8 Reading for key words

Find the words or phrases in 24.7 that tell you the following:

1 Very small amounts.
2 The things which are said to cause the trouble (though it has not yet been proved).
3 It is not damaged by being heated or cooked.
4 Something else that will do the job just as well.
5 A price that the manufacturers are willing to pay.
{tip Exercise 24.8::1 low concentrations
2 the alleged offenders
3 heat-resistant and can withstand cooking
4 an adequate substitute
5 an acceptable price}Key{/tip}

24.9 Structure practice: analysing a long sentence

The first paragraph of the magazine article in 24.7 is a long, complex sentence. It contains several separate ideas and pieces of information. Rewrite it as a series of short, simple sentences that will communicate the same ideas and information.


24.10 Listen and read

Anton Hiltmann telephones the editor of the magazine. Why does he also become angry with Stephen?

ANTON This is outrageous. Why is Maxy the only brand name mentioned in your article? Countless other brands use BHX. see the meaning And the least you could have done is spoken to me about it first. I intend to consult my company's lawyers this morning, and you may expect to hear from them very shortly. Goodbye!
PATRICIA I'm afraid the damage has been done, Anton.
ANTON Of course. Even if the magazine prints a retraction see the meaning, no one ever reads it - let alone believes it. see the meaning
STEPHEN Well, at least Maxy was the first brand name the journalist thought of - and he obviously knew his readers would recognise it.
ANTON You think so? I think this is deliberate sabotage. see the meaning
STEPHEN see the meaning You're being paranoid, Anton. However - speaking as a Standard Can director - I owe it to my colleagues on the board to ask what you intend to do to restore public confidence in your product.
ANTON Speaking as a - Stephen, don't you get tired jumping over that fence all the time! You offered to resign rather than see Hiltmann go to the wall. see the meaning You were appointed Food Products Vice-President - Maxy is your baby just as much as it is ours. see the meaning
PATRICIA Wait a minute! I'm just remembering a conversation Leo Schooler and I had with Jerome Fantam when we saw him in New York in July. Is it possible he'd deliberately start a rumour to wreck one of his own subsidiaries?
STEPHEN He might.
ANTON There, sabotage, you see. Who's being paranoid now?

24.11 Writing practice: a letter to the press

Anton Hiltmann decides to write a letter to the magazine that published the article about BHX and Maxy. The letter is polite but very firm. Write this letter for him. Use the notes below to help you.

{tip Exercise 24.11::This is a model answer; there are many possible ways of writing this letter.
As the Managing Director of J.F. Hiltmann, the manufacturers of Maxy sauces and seasonings, I am writing to correct certain errors in your recent article. We do, of course, use the synthetic compound BHX in our product. So does virtually every other manufacturer of similar products. It is done to protect the public by preserving the goodness and flavour of our sauces. Without this anti-oxidant, they would have a shelf-life of only a few days or weeks. The price would become unacceptably high, and the products would soon disappear from tne market. The same thing would happen if we attempted to replace BHX with any effective substitute. Two points in particular disturb me regarding your article. First, there is no conclusive proof that BHX, even in large amounts, can cause cancer. There are only the allegations of leaked reports from some unspecified government laboratories. Second, I do not understand why my firm's product is named by you although countless other products make use - quite properly - of the same additives. I hope that in your next issue you will publish a retraction and an apology.
Yours, etc., A. Hiltmann.}Key{/tip}

Assessing your chances

24.12 Listen and read

This is a radio report on the financial troubles at Standard Can. Listen to it carefully. What does the commentator think will happen to Hiltmann?


Next on Financial World Tonight, company news: and disappointing interim results {tip interim results::results published part of the way through the financial year.}see the meaning{/tip} for multinational giant Standard Can gave strength to rumours that the US holding company {tip holding company::a company that owns one or more subsidiary companies.}see the meaning{/tip} may be having second thoughts about its most recent acquisition, ailing German food manufacturer J.F. Hiltmann. {tip ailing::unhealthy; not progressing as it should be.}see the meaning{/tip} StanCan bought up Hiltmann last year, and there was a vigorous management shake-out that left former sales director Anton Hiltmann as the only surviving member of the Hiltmann family in an executive position. But in the last six months nothing has gone right, and a scare over dangerous synthetic chemicals {tip synthetic chemicals::chemicals which are manufactured, not natural.}see the meaning{/tip} in the product may turn out to be the last straw. {tip the last straw::the last in a series of problems. Although it may itself be a small problem, it may cause the company to fail.}see the meaning{/tip} Hiltmanns could go into receivership in the next few weeks {tip go into receivership::to stop trading. A receiver is a person who takes over the company's affairs, and who collects money which is owed to the near-bankrupt company and pays off as many of its debts as possible.}see the meaning{/tip}, unless current moves to stage a management buy-out can succeed.

{tip Exercise 24.12::The radio commentator's view is that Hiltmann is a company in great difficulty, and that unless the management buy-out succeeds, the company will go into receivership.}Key{/tip}

24.13 Reading for key words

Find the words or phrases in 24.12 that tell you the following:

1 Half-year trading figures that were less good than expected.
2 About to reverse a previous decision.
3 The last company that was taken over.
4 Getting rid or a large number of the company's managers.
5 Things that are being done at the moment.
6 A takeover of the company by its own managers, who buy all (or a majority of) the shares.
{tip Exercise 24.13::1 disappointing interim results
2 having second thoughts
3 its most recent acquisition
4 a vigorous management shake-out
5 current moves
6 a management buy-out}Key{/tip}

24.14 Listen and read

Anton and Leo are trying to find a solution to Hiltmann's problems. Listen to what they say. Is Leo optimistic or pessimistic? What about Anton? How do you know?

ANTON But as I was saying, Leo, the era of junk bonds and leveraged buy-outs is past. {tip leveraged buy-outs::takeovers financed by a lot of borrowing.}see the meaning{/tip} The banks have turned us down flat. {tip turned us down flat::refused even to consider our proposal.}see the meaning{/tip} Stephen keeps talking about 'mezzanine finance', whatever that is.
LEO I am confident in the end you'll succeed in negotiating very reasonable terms with Jerome Fantam. The idea of management plus workers buying out the company together makes extremely good sense.
ANTON Yes, of course. But if we can't raise the money within the next few days, our workforce are going to get cold feet {tip to get cold feet::to become nervous or frightened because of the risk of failure.}see the meaning{/tip}, and if Fantam thinks they may back out {tip back out::withdraw from the deal.}see the meaning{/tip} then he's liable to wind up Hiltmann and sell Maxy to the highest bidder. {tip to wind up::to pay its debts, sell its assets and end the existence of the company.}see the meaning{/tip}
{tip Exercise 24.14::Leo is quite optimistic. He says he is 'confident'. Anton is pessimistic. He thinks the workforce will 'get cold feet' and Jerome Fantam will close Hiltmann.}Key{/tip}

24.15 Listen and read

Leo is reporting back to Jerome Fantam about what he thinks is happening in Germany. Listen to what they say. Will Standard Can make or lose money if it sells Hiltmann now?

LEO I think the people at Hiltmann are moving towards the idea of a buy-out - management and workers together. How would we react to that?
JEROME Yeah, I guess Standard Can might agree to a demerger. {tip a demerger::the separating of a subsidiary from its parent company; the opposite of a merger.}see the meaning{/tip} We didn't actually pay a great deal to buy Hiltmann, but their marketing adventures over the past twelve months have cost us a small fortune.
LEO They seem very confident they can make it work.
JEROME Well, I know they think they can make a go of it {tip make a go of it::make it a successful company}see the meaning{/tip}, but what about all that investment we put in? Are we supposed to write that off as a bad debt? {tip to write that off as a bad debt::to agree that the debt will not be repaid.}see the meaning{/tip}
LEO Stephen Sablon appears to be quite willing for that to happen. He hasn't said anything about Hiltmann giving Standard Can any kind of compensation.
JEROME Tell Stephen I am very disappointed in him. I expected something more from him.
{tip Exercise 24.15::Standard Can is likely to lose money. They will get money from the management buy-out, but will lose money because they will have to write off their investment as a bad debt.}Key{/tip}

24.16 Structure practice: the next, the last

When we use 'next' and 'last' with a plural noun, we also need to use a number, or a word like 'few'. Anton says 'you'll be able to access the data direct within the next half hour', but the radio commentator says 'Hiltmanns could go into receivership in the next few weeks' and 'in the last six months nothing has gone right'.
Write answers to the questions below, using 'next' or 'last':

1 When will that letter be ready? [ten minutes]
2 Has anyone been in here recently? [twenty minutes]
3 Jerome Fantam is sixty. When's he going to retire? [ten years]
4 And when will Stephen Sablon be leaving the corporation? [a few minutes]
5 Someone told me Standard Can has taken over thirty companies. [fifteen years]
6 Do they sell off the assets every time? [a few times]
7 So Standard Can itself could be in serious trouble? [a year or two]
8 The Standard Can story seems to have been going on for ages. [three lessons]
{tip Exercise 24.16::These are model answers; there are many possible answers to these questions.
2 Not in the last twenty minutes.
3 Some time in the next ten years.
4 Some time in the next few minutes, probably.
5 Yes, in the last fifteen years it has taken over thirty companies.
6 Well, the last few times they have.
7 Not for the next year or two.
8 Only for the last three lessons!}Key{/tip}

24.17 Listen and read

Stephen is talking to a meeting of the European directors. Listen to what is said. Are the other directors as confident as Stephen that his new plan will work?

STEPHEN OK, quiet everyone, this is my proposal - we repackage the whole Maxy range in cubes in airtight foil wrappers, each cube individually wrapped. That gets rid of the anti-oxidant, we don't need it any more. It also gets rid of bottles and glass jars, which are perceived as environmentally unfriendly and which are fragile and heavy and generally bad news. Then a big advertising campaign to rebuild our image as green, wholefood, nature freaks.
PATRICIA Oh Stephen, you know as well as any of us that means at least another year's R&D and maybe twenty million dollars' advertising...
{tip Exercise 24.17::The other directors do not seem to be as confident as Stephen. They seem alarmed at the thought of another large investment programme.}Key{/tip}

24.18 Writing practice: Stephen Sablon’s notes

Once again, Sablon is writing his notes, trying to work out what courses of action are open to him at this moment. Write the notes for him, using whatever information you have from this lesson. What options does he really have?


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